Hannover Re increases premium volume in 1 January renewals
Reinsurer Hannover Re grew its premium volume in traditional property and casualty reinsurance by 14 percent adjusted for exchange rate effects in the treaty renewals as at January 1 2020. The price increase for the renewed business amounted to 2.3 percent.
"We can look back on a solid main renewal season that largely lived up to our expectations,” said Jean-Jacques Henchoz, chief executive officer of Hannover Re. "Thanks to our very good position as one of the world's leading reinsurers, we generated pleasing growth in our renewed portfolio at generally slightly improved prices and conditions. Nevertheless, it remains the case that the rate level for natural catastrophe covers in particular, and here above all in Japan, Latin America and the Caribbean, is too low and there is a need for further improvement."
Of the total premium volume booked in the previous year on an underwriting-year basis in traditional property and casualty reinsurance amounting to €10,555 million ($11,658 million) treaties with a volume of altogether €7,049 million - or 67 percent of the business - were up for renewal as at 1 January 2020.
Of this, a premium volume of €6,305 million was renewed, while treaties worth €1,663 million were either cancelled or renewed in modified form. Including increases of €810 million from new treaties and from changes in prices and treaty shares, the total renewed premium volume came in at €11,541 million.
The strongest growth in the renewals - at 15.5 percent - derived from proportional reinsurance, which generated a renewed premium volume of €6,027 million. Prices here were up by 2.1 percent. The renewed premium volume in non-proportional reinsurance grew by 9.7 percent to €2,007 million. The price increase amounted to 2.9 percent.
Hannover Re said that business in North America, the United Kingdom and agricultural risk deliver particularly significant growth.
In North America the premium volume grew by 19.5 percent in the January 1 renewals.
The premium volume in Latin America, the Iberian Peninsula and in agricultural risks surged by 35.1 percent, driven above all by growth in worldwide agricultural business.
The premium volume from business in the United Kingdom, Ireland and the London Market grew by 22.1 percent.
The premium volume in natural catastrophe business grew by 7.8 percent, with price increases for the most part coming in lower than expected. Competition remained fierce even though the available capacities from the ILS market contracted slightly.
"The positive trend that emerged from the 1 January renewals should become more pronounced in the subsequent rounds of renewals during the year, not least because these also concentrate more on the loss-affected programmes", Henchoz noted. "With this in mind, we are confident of achieving all the goals that we have set ourselves for the 2020 financial year."
As already announced in November, Hannover Re expects Group net income of around €1.2 billion for the 2020 financial year. Based on constant exchange rates, it said gross premium should grow by around 5 percent and the return on investment should be around 2.7 percent.
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